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Call for Evidence Minimum Salary Thresholds Tier 2

The Migration Advisory Committee (MAC), the body that advises the Government on migration issues has been asked to advise on raising the minimum salary threshold for the Tier 2 category, as well as the wider Tier 2 review resulting for the Government’s recent proposals on curbing migration.

In the first instance, the MAC has been requested to provide early advice on the economic rationale and impact of setting new (experienced and first entrant) minimum salary thresholds for the Tier 2 category.

The MAC has been asked to complete this work before the summer recess and given a deadline of 21 July 2015. As a result, the MAC is requesting interested parties to contribute to the consultation through their ‘call for evidence’ by 3 July 2015. The MAC response to the wider review of Tier 2 will be required by mid-December 2015.

We set out below the background and method of how organisations can participate to this consultation, as well as include the link to the MAC publication where the full details are available, including full key data and statistics.

We strongly urge and advise our clients in particular and businesses in general to send their views!

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What has the MAC been asked to consider as regards salary thresholds?

The MAC has been asked to consider the impact of:

I. Increasing the Tier 2 (General) minimum salary threshold of £20,800 and the Tier 2 (ICT) minimum salary thresholds of £24,800 for the short-term category and £41,500 for the long-term category to a level that better aligns with the salaries paid to highly-specialised experts, or individuals filling skills shortages skilled to NQF level 6 or higher;

II. Increasing the Tier 2 minimum salaries per occupation for experienced workers from the 25th percentile to the 50th or 75th percentiles, or other appropriate measure;

III. Increasing the Tier 2 minimum salaries per occupation for new entrant workers from the 10th percentile to the 25th or 50th percentiles, or other appropriate measure.

Salary Threshold and Working Hours

The rates used to determine salary thresholds are based on a 39-hour working week for full time roles as per the Annual Survey of Hours and Earnings (ASHE). Where the source differs to ASHE, weekly hours for salary threshold purposes are considered as follows:

• 37.5 hour week where the source is the NHS Agenda for Change, or the Royal Institute of British Architects;
• Where the source is teachers’ national pay scale, the definition of full-time teachers is used when determining those pay scales;*
• 37.5 hour week where the source is the National Grid submission to the MAC;
• In all other cases, a 40 hour week

Current Tier 2 Salary Thresholds

At present, salary thresholds in the various Tier 2 categories stand as follows:

• Tier 2 General – minimum salary requirement £20,800 per annum or market rate as defined by the Occupation Codes of Practice (whichever is higher)
• Tier 2 Intra-Company (ICT) Transfer Long-Term – minimum salary of £41,500 or the appropriate rate for the role (whichever is higher)
• Tier 2 ICT Short-Term Staff, Graduate Trainee, or Skills Transfer – minimum of £24,800 or the appropriate level for the role (whichever is higher)
• Staff who are already in the UK on a Tier 2 ICT Visa or Work Permit issued before 6 April 2011 be paid at least at the appropriate rate

Questions MAC is Asking All Interested Parties and Affected Businesses to Consider and Address:

The questions set out below are regarded by the MAC as aiding to identify some key issues when considering the review of salary thresholds for the Tier 2 routes. Respondents do not need to answer all 10 questions; however, you are encouraged to give considered responses to those areas which will impact your organisation and its operations:

1. How do the existing salary thresholds for Tier 2 compare to, and impact on, the overall wage distribution for each occupation?

2. What types of jobs and occupations are done by highly-specialised and/or highly-skilled experts, and what is pay a good proxy for this high level of specialisation skill?

3. What would be the impact of increasing the thresholds to a level that better aligns with the salaries of highly-specialised and/or highly skilled experts?

4. What would be the impact of increasing the thresholds to a level that restricts the route of occupations which are experiencing skills shortages to NQF Level 6 or higher?

5. What would be the impact of increasing the Tier 2 minimum thresholds from the 10th to the 25th percentile for each occupation for new entrant workers?

6. What would be the impact of increasing the Tier 2 minimum thresholds from the 25th to the 50th or 75th percentiles for each occupation for experienced workers?

7. As an employer, what would be the impact of increasing the Tier 2 minimum thresholds on: a) hiring migrant workers from outside the EU; b) hiring migrant workers from within the EU; c) hiring natives?

8. Are there additional national pay scales or sources of salary data that should be used to set the thresholds?

9. What other appropriate measures would you like to see for determining the minimum salary thresholds?

10. Should the minimum salary threshold take account of variations in regional pay? If so, how?

How to Contribute Your Thoughts?

You can read the full briefing document here. Please send responses to the questions above to the MAC Secretariat by 3rd July 2015, either by post or email at:

mac@homeoffice.gsi.gov.uk

Migration Advisory Committee
3rd Floor
Seacole Building
2 Marsham Street
London SW1P 4DF

The MAC advises that responses received after 3rd July 2015 could still be considered for the wider Tier 2 review to be delivered by mid-December 2015, so making your voice heard even after the 3rd July 2015 deadline is not in vain.

Please also note that the MAC may quote evidence received and attribute it to the individual or organisation in the final report, unless you explicitly ask not to.

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